Coinbase Backs Fed Payment Accounts with Reform Demands

Coinbase has filed comment letters in favor of the Federal Reserve's proposed payment accounts, which would allow eligible financial institutions to clear and settle payments directly through the central bank's infrastructure.

The exchange is advocating for three reforms: interest on a threshold amount of balances, overnight balance limits based on actual payment needs, and oversight commensurate with risks.

Coinbase Chief Policy Officer Faryar Shirzad called the accounts 'an important step towards modernizing the U.S. payment system.'

The proposal would target companies outside the traditional banking system, such as crypto and fintech companies, which currently have to send payments via intermediary correspondent banks, adding cost, time and counterparty risk.